Are You Thinking about Physical Stores? 
 Don’t be Misguided!

From Marcus Fox, CEO Agile Retail & iD Agency

Entering Retail is a natural step – indeed, often a need – for brands who trade online, or who trade in other countries. But increasingly in recent years, Entering Retail has become a step too far – very expensive, very uncertain, and littered with high profile failures.

At Agile Retail and iD, we believe that’s a stigma that should be shaken – entering physical retail can be nimble, flexible and commercially viable.

I spend my time helping brands – very often DTC, scale up businesses, or retailers who do not currently trade in the UK – approach the challenge of Entering Retail in a different way; a way that suits today’s customer and company climates. Retail is too often a gigantic leap – expensive, long term, risky and consequently prohibitive. And the annals of history are littered with more examples of failure (Missguided!) and challenges (Gymshark) than they are of success stories.

It doesn’t have to be this way. I wish more brands approached retailing in physical stores with a challenger mindset. Instead of accepting the trappings of physical retail, we should disrupt them. “Flagship store?” What an expensive vanity project! “P&L’s that don’t account for browser-power and the relationship with online sales?” Straight out of the ‘50’s! “Long term leases?” Who knows what the next 5 years looks like!

Here are some practical ways I approach Entering Retail with customers we work with at Agile Retail:

The store location & lease

It’s a big bet to decide where to put the physical building of your first store. Three things are really critical to this decision – objective-setting, insights and flexibility. The role of the store, and what we are trying to achieve with physical retailing, will have a big bearing on the right location for the store. A store that’s primarily intended to allow customers to see, experience and showcase a brand, for example, might be best located in a busy shopping area. However, stores are often about opening up white space; going to places your customer doesn’t normally see you; and in those instances, a different location strategy might be more important. Equally, if the primary purpose of the store is sales and profit driving, the location you choose is unlikely to be “the obvious one!”

Once these objectives are determined- research, research, research. In the last 10 years the team at Agile Retail have developed robust systems and processes to investigate if a physical store presence will resonate with customers. Some of this work can effectively be delivered from desk-research – demographics, competitor analysis, failure rates and so on; but there’s no substitute for developing some direct, primary interactions with target consumers in their area to find out what’s really going on. Be learning obsessed and want to drive to make things real. The investment is more than worth it!

Finally, flexibility is key. The chances are that the first location won’t be quite right, or wont be right forever. I reject the landlord-oriented retail leasing model in the UK, where we’re still stuck asking retailers to commit to 5-10 years or more for a retail lease. Flexibility is key – short rolling leasing arrangements of the type we execute at Agile Retail allow us to prove a retail store really works before committing to long term investment.


Key Questions:

  • How will you validate that the location of your store is the right one for you, not just an “obvious choice?”
  • How will you ensure that your lease structure allows you flexibility to extend / leave based on performance versus key objectives?

The experience design

Taking our cue from our objective setting, the role of the store in “selling product” is increasingly diminishing. Rather, new entrants should be building the store experience around other key requirements, including:

  • Showcasing your product and experience to as many customers with the greatest fidelity you can
  • Understanding your target consumer better – the physical store is the best forum you will ever have for a free “data exchange” with your target consumers. Give them a memorable experience in exchange for understanding their shopping habits, what they love about your brand and what they don’t, and so on.
  • Driving revenue online and providing services – the store is your hub for all the touchpoints your customer could have with you. Make sure the store experience allows online ordering, collection, returns, questioning, virtual showrooming – and everything else your consumer needs!

Flexibility and pivoting applies as core ingredients of our store build. Too many brands struggle to deliver a great consumer experience because fitting out a store is very permanent and awfully expensive. Practically, I challenge brands Entering Retail to recognise that the format / experiences provided on the first day of trade will inevitably change and evolve. We’ll learn what consumers respond to and enjoy, and what they don’t. This also helps when we remember that we may well need to change store quite early in our Entering Retail journey!

Key Questions:

  • How will you develop inspiring, exciting and omnichannel retail experiences that delight and inspire consumers?
  • How will you fabricate and build stores in a flexible, changeable way to keep costs down and flexibility high?

Retail Experience Experts

Labour costs are one of the largest expenses for a physical retail store. People are the brand’s greatest asset, and great people really do drive sales. But a store’s workforce needs to be deployed with skill and expertise to get maximum return for those investment pounds.

In my experience, retail staffing is often the most under-thought part of Entering Retail. Labour planning can be a massive tool to help the brand drive sales, marketing, experience and brand affinity – but your people need an immense amount of time, attention, engagement and cultural development to get there.

The required profile of retail store teams has also changed significantly in recent years. Until recently, store employees needed to be “functional first” – their jobs were to replenish shelves, man tills, pack bags, and assist customer purchases.

In the age of experience-hungry consumerism and digitally enabled shopping, that skills requirement has changed. Now, retail store teams need to be experts in engagement – how to interact quickly and effectively with consumers, demonstrate and explain technologies and products with passion and excitement, and live and breathe brand ethos. This is a totally different way of “staffing stores” and many brands Entering Retail spend excessive funds delivering poor staffing experiences.

Key Questions

  • What thinking are you giving to in-store teams, who have never worked for the brand before, and how they live the brand ethos every day?
  • Are you starting your retail staffing planning with experience, engagement and performance skills top of mind?

Insights, Learning & CHANGE

Retail doesn’t stand still. Its always been true, but its even truer today. Successful retail brands – particularly those Entering Retail for the first time – build an obsession with insights, analysis and continual change into their retail planning. Sometimes this is really visible – like changing a whole store layout or even the physical store location. But Other times it is more subtle – the best insights to improve a store experience and performance comes from active listening to your customers and competitors.

But its equally important to develop a clear proposition for how you appraise your retail store. Returning right back to our initial objectives, it is important when Entering Retail to be really clear on how we’ll measure success – tracking sales in store, certainly; but the P&L of tomorrow requires giving at least equal rate to other important metrics only the physical store can provide; brand visibility and awareness; brand experience; consumer retention through digitally supported channels; content creation, and so on.

Key Questions:

  • What does the “P&L” look like for you to Enter Retail? Have you really reduced the costs as much as possible to give yourself the best chance of succeeding in stores?
  • How will you collect insight, analyse consumer feedback, and act on it to make sure your stores are a resounding success?